Tightened Down

The huge spending, both public and private, brought loud warnings from the Administration of runaway inflation. To fight what turned out to be a phantom, the Administration tightened control of credit and concentrated on a system of direct controls of prices and wages. It failed to realize that such curbs, unavoidable in an all-out war, were hardly needed in the cold-war economy of 1952. In any case, the Administration's controls were a mockery; price and wage bosses went in & out of office so fast that most civilians hardly knew--or cared--who was in charge. The tremendous flood of industrial production, plus a bumper farm crop, kept prices stable and checked inflation. By year's end. commodities were down 12 1/2%, almost back to their pre-Korea level.

The cost of living seesawed slightly during the year, and at the end was at a record 196.9 above the 1935-39 average. But the rise was only 1%, and well below the 5% rise in wages.

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